Unipetrol's financial results will be worse in H2 2003 than in H1 (consolidated profit of CZK 727m) due to the higher price of oil and other inputs, CEO P. Svarc said in an interview for the Czech Press Agency on Friday. This rather vague comment is unsurprising given Unipetrol's previous indications that appealing Q1 03 margins were unsustainable throughout the year. Indeed, we expect Unipetrol's consolidated net profit to approach zero in H2. Mr. Svarc also said that the company would invest approx. CZK 10bn into ecological projects at its subsidiaries by 2007, partially due to stricter EU requirements. As regards the Czech Republic’s EU entry (expected in May 2004), it should not significantly change Unipetrol's position and operations, since there are virtually no trade barriers between the EU and the Czech Republic at present with regard to commodities and products bought and sold by Unipetrol. Mr. Svarc mentioned, however, that Unipetrol's new owner (i.e., after the privatization is completed) could improve its export potential after EU accession. Neutral.
Jiří Soustružník